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The 2006 PIA Federal Legislative Summit - Where You Make the Difference!

There's no such thing as an overnight success on Capitol Hill. Legislative victories require sustained hard work and dedication - the kind...
February 1, 2006

There's no such thing as an overnight success on Capitol Hill.  Legislative victories require sustained hard work and dedication - the kind PIA specializes in.

Over the past year, PIA members participated in grassroots action campaigns that succeeded in achieving two of our association's federal legislative goals: renewal of the Terrorism Risk Insurance Act (TRIA) and the extension of borrowing authority for the National Flood Insurance Program (NFIP).

Both issues came to a head at the end of year. In the end, we were successful, but our success was not the result of just one meeting or one phone call. The groundwork for such legislative successes is continually being laid - all year long, in every state and congressional district - and the key is the involvement of individual members of PIA, who play their part in the process.

2006 PIA Federal Legislative Summit

Each year, PIA's program of legislative advocacy is carried out on both the local and national level. Increasingly, state and federal legislative efforts have become more entwined, with actions taken or not taken by state legislatures affecting legislative proposals on the federal level, and vice versa.

The focal point for all the activities that make up the federal component of PIA's year-round program of legislative advocacy on Capitol Hill is the annual PIA Federal Legislative Summit. PIA's FLS is not the beginning or the end of the process, it is one critical component that pulls everything together.

"Laws being considered and passed by Congress have a direct impact on the ability of our members to serve the insurance needs of their customers," said PIA National President Ray L. Peretti. "We must always be proactive in Washington, D.C. to ensure that as far as PIA members are concerned, good legislation is passed, bad legislation is not and lawmakers see things from our point of view."

On April 6, 2006, PIA members will travel to our nation's capital to participate in the 2006 PIA FLS, a series of legislative briefings and meetings with their elected representatives.

The work PIA does all year serves to lay the groundwork as you take PIA's involvement to a more concentrated level through personal, face-to-face contact with federal lawmakers. No more emphatic an impression can be made on Members of Congress than when you visit them in their offices in Washington, D.C.

The 2006 PIA FLS will begin during the evening of Wednesday, April 5 with an in-depth issue briefing and Q&A at the Marriott Crystal City in Arlington, Virginia, our headquarters hotel. The following morning, participants will gather on Capitol Hill for a breakfast program with a briefing by a Member of Congress. There, PIA members will again be briefed on PIA's current legislative initiatives, be given issue sheets to hand out on Capitol Hill, receive congressional handbooks and listen to an inspirational speaker. Last year's speaker was Rep. Spencer Bachus, (R-Alabama), Chairman of the House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit.

Agents will spend the remainder of the day on Capitol Hill meeting with lawmakers regarding issues that are important to independent insurance agents. Between visits to Members of Congress, participants will report on their progress and be able to unwind in the Debriefing Room, conveniently located at a Capitol Hill locale.

Following the day of lobbying on the Hill, all FLS participants are invited to an FLS reception sponsored by the PIA-Company Council of Executive Officers (PIA-CCEO). The reception is followed by the PIA Political Action Committee's annual PIAPAC Dinner.

Building On Our Successes

It's time now to lay the groundwork for our legislative victories of 2006 and beyond.

Key components in PIA's successful efforts last year to secure renewal of TRIA and funding for NFIP were twin Grassroots Action Alerts, conducted nationwide, as each issue was being decided in Congress. PIA members were urged to contact their Members of Congress, and they did. Thousands of individual e-mails from independent agents were delivered to Congress as a result of the PIA campaigns.

"The importance of grassroots action cannot be overstated," says Peretti. "It is an especially effective advocacy tool to advance our agenda - one that we must never be reluctant to use, and use aggressively, when issues of critical importance to PIA members are being decided by lawmakers."

"PIA members can be justifiably proud," Peretti said. "As a result of their involvement, insureds across America continue to have access to terrorism insurance and NFIP policyholders whose properties were devastated by flood will be getting the money they are due, so they can begin to rebuild their lives."

2006 Issues of Focus

PIA's top issues of focus this year include our support of a national natural catastrophe plan and our support of continued funding along with common-sense reform of the National Flood Insurance Program.

In the wake of the hurricanes of 2005, the PIA National Board of Directors voted unanimously to call on Congress to adopt and fund a coordinated natural disaster catastrophe program. Such a program should be designed as a public-private collaborative effort.  It should include prorated participation by states and local governments, together with the all sectors of the financial services industry, in the creation of a backstop for natural catastrophes that provides a financial reserve backstop for insurance carriers suddenly overwhelmed by the onslaught of extraordinary claims-payouts resulting from natural disasters. The goal of such a program is to provide immediate financial stability to markets in the immediate aftermath of natural disasters; to allow continued market stability; and to provide sufficient time to build back market capacity.

The hurricanes of 2005 have also placed additional pressure on the National Flood Insurance Program (NFIP). As claims soared in the aftermath of the storms, NFIP had to go to Congress for authorization of an increase in borrowing authority. PIA conducted a successful grassroots campaign in November 2005 to secure this additional funding to pay the valid claims of NFIP insureds.

At the same time, Congress is adamant that the flood insurance program be reformed. On November 15, PIA sent an updated series of proposals addressing NFIP reform to the members of the House Financial Services Committee. The proposals build on those PIA already submitted to a subcommittee of the House Financial Services Committee on October 20, and to the Senate Banking Committee on October 18. So far in 2006, two hearings on proposed NFIP reforms have been held in Congress.

And then, there's SMART - the State Modernization and Regulatory Transparency Act.

This package of insurance regulatory reform proposals has been the topic of hearings and drafting sessions in the House Financial Affairs Committee since mid-2004. But to date, SMART is still what it has always been, merely a "discussion draft." PIA has filed comments on several of the 17 sections of the discussion draft but - unlike some other groups - we purposely withheld a determination on whether or not PIA will support SMART, because PIA does not endorse legislation that has yet to be crafted. Down South, that's known as "buying a pig in a poke."

As it stands, the draft that was circulated for discussion is entirely too complicated, and many key questions remain. No second draft of SMART has circulated for discussion and no bill has been formally introduced. As a result, we continue to withhold endorsement.

On the Senate side, something PIA opposes vehemently is being supported by Sens. John Sununu (R-New Hampshire) and Tim Johnson (D-South Dakota), and may get traction this year. They are sponsoring legislation to allow creation of an optional federal charter for insurers. PIA's position remains the same: we oppose federal legislation that undermines, rather than supports, functional modernization of state regulation. Specifically, PIA opposes an optional federal charter, as it is incompatible with our support for state insurance regulation.

Congress' appetite for dealing with something as controversial as insurance regulatory reform may not be that great in 2006, an election year. If this is the case with OFC, that would be great. Such reticence may also apply to moving all 17 sections of SMART.

Registration information for the 2006 FLS and the PIAPAC Dinner as well as hotel information can be found at here.

We hope you can join us in Washington, D.C. PIA scored some impressive wins recently. Now, it's time to get back to work.

[Editor's note: Since this article was written in late February 2006, additional information regarding PIA National's 2006 positions has been developed and made available to the insurance community. PIA position papers can be downloaded here.]

PIA Connection

This article originally appeared in the February 2006 PIA Connection.